indian hotel industry survey 2003-2004

8/8/2019 Indian Hotel Industry Survey 2003-2004

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Table of Contents

.oreword from the President, .HRAI 1

Message from HVS International 5

Introduction & Key Highlights of the Survey 6

Trends & Opportunities in the Indian Hotel Industry 12

1 Indian Hotel Industry - by Star Category 20

2 Indian Hotel Industry - by Hotel Size & Chain Affiliated vs Independent 30

3 Indian Hotel Industry - Seven Major Cities 39

4 Indian Hotel Industry - Twelve Other Cities 50

Hotel Analysis Worksheet 61

HVS International 62

CNN 63

The Worlds News Leader


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.OREWORD

The .ederation of Hotel & Restaurant Associations of India is pleased to present the seventhannual edition of the Indian Hotel Industry Survey 2003-2004 in cooperation with HVSInternational and our sponsor CNN We started this research project in 1998 with operationaland financial figures of the Indian hotel industry based on the responses received from ourmembers for the financial year 1997-98 We are happy to say that this project has been sustained

by us for the last seven years and we hope to continue with it in the future

We are grateful for the cooperation extended by a large number of .HRAI hotel members whohave supplied detailed information for this survey report The figures in this report are, therefore,

based on authentic data from hotels across the country and give a true picture of the performanceand trends in the Indian hotel industry in the year 2003-04 The document covers a number ofareas in terms of facilities, manpower, occupancies, marketing trends and operationalperformance, integrating all aspects of the hotel industry We are aware that a large number ofhotel professionals, investors, bankers, consultants, researchers, government officers in tourismdepartments, media persons and others value this document for reference and for researchpurposes Professionals based abroad also use this document for a study of the Indian hotelindustry Most of all, it provides reliable data for feasibility studies and investment decisions tothose interested in setting up new hotel projects in various cities in India

As always, we have included an analysis of seven major cities from where we have receiveddetailed information on a number of hotels in different star categories In addition, we haveincluded information on twelve other cities where information was available with us for somehotels, though not in sufficient number for all the star categories We would like to includeinformation on additional cities, provided we get sufficient number of responses from ourmember hotels through the Hotel .act Sheet (H.S) sent to them every year in April We alsourge upon them to try and send us their full financial / operational data as per the H.S, asmany members are not including full data on these parameters The result is that while wehave basic data for 1,109 members (out of about 1,777 active hotel members at the relevanttime), we have the financial data only for 484 hotels We will continue to make efforts to persuademore of our hotel members to participate in this research project We again assure you that all

the data is used only for averages and no data on individual hotels are released by HVSInternational or by .HRAI to anyone under any circumstances

We continue to strive for improvements in the content and presentation of the annual editionof the Indian Hotel Industry Survey We will be happy to receive any comments and suggestionsfrom the users of this report We are thankful to HVS International for their continued supportfor this project for the past seven years Our sincere thanks also to the management of CNN,who has sponsored the current edition

M P PurushothamanPresident, .HRAI

HVS International Page 1 .HRAI


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CNN, the worlds news leader, is pleased to be associated with the 2003-2004 .HRAI - HVSsurvey on the Indian hotel industry The annual survey, in its seventh year, is regarded asIndia's most comprehensive hotel industry report on operational statistics, and it is only naturalfor the world's trusted news network, CNN, to partner the collaborative effort of .HRAI andHVS International

In today's environment, where the need to know is of prime importance, travelers are particularlyconcerned with being cut-off, even temporarily from their customary sources of news That iswhy so many frequent travelers choose to watch CNN over any other cable and satellite newschannel

The CNN Hotel Partnership Program was successfully launched in the early 1990s, and sincethen, over 5000 hotels across the globe enjoy the benefits of the Partnership Programme Theobjective of the programme, then as it is now, is to enable CNN partner hotels to reach similartarget demographics in a most cost-effective manner The comprehensive, strategic marketingprogramme boasts of high multimedia exposure, and is every hotelier's solution to targetinginternational travelers

According to the PAX full year results covering fieldwork conducted between July 2003 andJune 2004 (conducted by Synovate), CNN is the clear leader among international news andbusiness channels in Asia Pacific for the eighth consecutive year The survey also proves thatCNN is consistently the most effective news and business channel in reaching the topmanagement group and business decision makers, attracting 88% more top management thanthe next most targeted channel In the broader PAX demographics groups, CNN reaches atleast 80% more viewers than any other news channel

Therefore, by enrolling in the programme, hotels can:

Reach the region's influential frequent travellers, business decision makers and more

Promote the brand to over 250 million affluent television households, 650,000 hotel guestrooms regionally and millions of Internet users worldwide

Maximize the value of the brand by partnering with one of the leading global brands -CNN

These benefits are exclusive to CNN Partner Hotels and the customised programme givesparticipating hotels a leading edge in today's rapidly changing global economy at a fraction ofthe cost of normal marketing programmes To learn more about the programme, please fill inthe enclosed form, and fax the form to us Our Sales Executive will be in touch with you


.HRAI Page 2 HVS International


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ON CNN:

CNN International is the world's leading 24-hour global news network CNN Internationalcan be seen in more than 175 million television households in 200 countries and territories

through a network of 38 satellites Since September 1997, CNN International has beenregionalised into five separately schedules channels: CNN International Europe/Middle East/Africa, CNN International Asia Pacific, CNN International South Asia, CNN International LatinAmerica and CNN International USA In 2003, CNNj, a channel created specifically for audiencesin Japan, launched in partnership with Japan Cable Television (JCTV), and partial programmingof which has Japanese translation

CNN - THE CHANNEL O. CHOICETHE HPP BENE.ITS

The CNN Hotel Partnership Programme allows your hotel to partner with CNN and benefitfrom the value-added multi-media promotional benefits Should you wish to know more about

the programme, please fill the form overleaf, and fax the form to us Our Sales Executive will bedelighted to get in touch with you

Promoting Your Hotel Online

CNNcom/travel is a leading-edge consumer travel site that features and prioritizes CNN PartnerHotels The site offers the end user full "real-time" booking ability of CNN Partner Hotels,generating exposure and increased business for participating properties

CNN On-Air Promotions

An International TV promotion, featuring partner hotels and resorts on CNN With CNN's

On-air Hotel Promotions your hotels gains invaluable, high impact exposure on CNN Youcan list your hotel name, location and country of each hotel

* CNN On-air Hotel Promotions are available to all Gold CNN Partner Hotel Groups and Gold CNN Partner individual hotels only

Discounted Advertising Online

As a CNN Partner Hotel, we can offer your property discounted advertising on all of theCNNcom website, one of the most visited high-traffic websites in the world

Discounted Advertising and subscription rates to CNN Traveller Magazine]

CNN Traveller is a bi-monthly magazine designed for the discerning International businessand leisure traveller CNN Partner Hotels receive a discount on subscriptions and can placethese magazines in lobbies and hotel rooms as an extra guest amenity

Affiliated Consumer Publications

As part of the TimeWarner group, CNN is able to offer Hotel Partners preferential rates onother media properties within the group* Particularly appropriate for hotels attracting a

business and up-scale clientele are TIME, the world's leading newsmagazine; .ORTUNE, thedynamic international business title known for its coverage of leading-edge companies andindustries

*Rates offered are subject to existing and agreed upon terms and conditions



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.ax to: (New Delhi) +91-11 2647 5206, CNN Hotel Sales

Should you like to know about the programme, please complete the form and fax to the numbergiven above:

Yes please send me more information on the CNN Partnership Programme

(Please tick one)

We currently offer CNN to our hotel guests

We currently do not offer CNN to our hotel guests

Name of Hotel: ___________________________________________________________________

Group Affiliation (if any): __________________________________________________________

Address:_________________________________________________________________________

________________________________________________________________________________

City for Listing:___________________________________________________________________

Telephone: County Code:__________ Area Code:__________ Number: ___________________

.acsimile: County Code:_________ Area Code:________ Number: ______________________

Reservation E-Mail: _______________________________________________________________

Website: _________________________________________________________________________

Total Number of Rooms: __________________(including suites __________________________

NB: Terms and conditions apply

.or more information on CNN Hotel Partnership Programme, please email tochandparvez@turnercom or contact:

Mr Chand Parvez,Turner International India Pvt Ltd,S-2 Level Block .,International Trade Tower,Nehru Place, New Delhi 110 019Tel: +91 11 51699114.ax: +91 11 2647 5206



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HVS International is an association of integrated companies providing a wide range of servicesto hotel owners, lenders and operators In 2005, HVS International celebrates 25 years ofoperations We continue to endeavour to fulfil the growing demand for reliable and well-documented hotel market studies and feasibility reports Today, our firm provides the hospitalityindustry a full range of consulting services, including valuations, market and feasibility studies,executive search, hotel acquisitions, strategic analyses, development support, environmentalconsulting (ECOTEL), operator search & selection, operational and management strategydevelopment, timeshare consulting, marketing communications, and technology strategiesOur company has offices in 21 cities across the globe

HVS International has worked with over 12,000 hotels in more than 65 countries across theglobe, involving many hotel projects in south Asia, including 26 cities in south Asia With morethan 250 professionals worldwide, we are able to offer global services that are locally deliveredWe have been in India since 1997 and have now completed over 90 consulting assignments inthe south Asian region including various cities in Pakistan, Bangladesh and Sri Lanka

HVS International's New Delhi office has been active on the advisory front for hotel acquisitionsand exclusive sales mandate of hotel assets across India It has also extended its services tooperator/investor search and negotiating management contracts, convention services consultingand consulting for mixed-use real estate development Another fact of note is that the NewDelhi office is responsible for all ECOTEL certifications globally

The Executive Search division in New Delhi commenced operations in May 2001 The divisioncaters mainly to the hospitality and services market: our core competencies include retainedexecutive search, compensation design, and employee assessment The Association of ExecutiveSearch Consultants (AESC) governs our practice and our objective is to set up new benchmarkswithin the recruitment process in the hotel sector in this part of the world Recently, HVSextended its executive search activities to Hong Kong and London We will be opening anoffice in Dubai in early 2005

The Indian Hotel Industry Survey 2003-2004 brings together the industry's key statistics in oneeasy reference volume The publication continues to emphasise the scale and importance ofthe hospitality, tourism and leisure industry in the Indian economy, by providing readers keyinformation about this vast and growing industry We are truly grateful to all those who havekindly contributed their hotel's results and we look forward to further increased participationfrom hotels in the years to come As always, we welcome any suggestions for improvement

.or further clarification on this report or on HVS International's services, please contact us at:HVS International, C-67 Anand Niketan, New Delhi 110 021, IndiaTel: (91) (11) 2410 1005 .ax: (91) (11) 2410 1066 email: lsabharwal@hvsinternationalcom

To learn about HVS' worldwide operations, please visit wwwhvsinternationalcom

Manav Thadani Lokesh Sabharwal Chandrima Budakoti

Managing Director Consulting & Valuation Analyst Research Analyst



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Introduction & Key Highlights of the Survey

Introduction to the .HRAI Indian Hotel Industry Survey

Statistics are presented by star category, by size (according to number of rooms) and by 'chainaffiliated' and 'independent' hotels Also, separate operating indicators are included for thefollowing 19 cities:

Agra Chennai Indore Nagpur ThiruvananthapuramAhmedabad Cochin Jaipur New Delhi UdaipurBhopal Goa Kolkata Pune VadodaraBangalore Hyderabad Mumbai Shimla

To ensure confidentiality and to provide a meaningful representation, data for each star categoryand city has been presented only in cases where the sample consisted of at least four hotels Inaddition, All India trends for the past five years are also presented

As in the previous years, a unique feature of this report is that it presents the number ofparticipating hotels for each area of analysis - room profile, .&B facilities, employee information,market segmentation, occupancy, revenue and expense information, and so forth This allowsthe reader to assess the validity of the results, based on the number of participants 'ID' indicatesinsufficient data received

To enable better comparability of data, we have presented the financial statements up to netincome, before any deduction of depreciation and interest, which are too hotel/owner specificto render their comparison to be meaningful

All amounts presented in this report have been rounded up the nearest whole number and arein Indian rupees (Rs) for fiscal year 2003-04 (April-March) In the financial statements, Rupeeamounts are shown as amounts per available room (PAR) and per occupied room (POR) inorder to eliminate differences in the size of hotels surveyed Market mixes, ratios of varioussales and appropriate departmental expenses have also been presented In addition, we haveprovided highlights throughout the document to reflect certain key aspects of our findings

Market data has been presented as an average of the respective segments and as a percentage.inancial data has been presented according to the most common measures of industryperformance: as a percentage of revenue, and as amounts PAR and POR

The amounts and ratios presented should not be considered a standard for any type of property,region, city, star category or price category, but only as a guideline for comparison with theoperating results of a specific category Readers of this report must also keep in mind that large




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differences from one year to the next for a particular item may be partly on account of a differentmix of survey participants (thus affecting the average figure), rather than an actual year-to-year change This is relevant for some of the unusual figures in the city trends also

As in the past two years, we have included a Hotel Analysis Worksheet at the end of the report,for hoteliers to analyse their financial data and compare with that of their competitors, whichwill help them in budgeting and in developing their strategies

Highlights of the Indian Hotel Industry Survey 2003-04

This seventh edition of the Indian Hotel Industry Survey presents a study of 1,109 hotels (60,773rooms) across various cities in India, compared to 1,037 hotels (54,142 rooms) last year Mumbaihad the largest number of survey participants (91 in all categories), followed by Pune (32 in allcategories), Kolkata (30 in all categories), New Delhi (28 in all categories) and Bangalore (24 inall categories)

It is heartening to note the increased response to the survey from the previous year in terms of

respondents and categories of respondents Significantly, Vadodara and Nagpur have beenpresented in detail for the first time The increased participation of larger hotels in the surveyof 2003-04 (more than 150 rooms), most of which have brand or chain affiliation, has resulted inan overall increase in average rates reported and highlight stronger market conditions

As before, in this issue as well, we present two key operating characteristics - occupancy andaverage rate - for 30 important hotel markets, and on an 'All India' basis This is followed by alisting of the main findings of our survey

City 1999-2000 2000-2001 2001-2002 2002-2003 2003-2004 1999-2000 2000-2001 2001-2002 2002-2003 2003-2004

All India 51.7% 55.6% 53.2% 54.8% 59.7% Rs2,123 Rs2,046 Rs2,058 Rs2,004 Rs 2,689

Agra 46.0% 55.4% 42.9% 42.2% 51.0% Rs1,535 Rs1,615 Rs1,269 Rs1,232 Rs 2,201

Ahmedabad 51.9% 57.7% 59.9% 51.3% 57.0% Rs2,227 Rs1,921 Rs1,749 Rs1,740 Rs 2,004

Aurangabad 36.4% 44.8% ID 34.1% 63.0% Rs1,024 Rs1,378 ID Rs1,733 Rs 2,998

Bangalore 57.1% 72.1% 62.8% 72.4% 78.9% Rs1,349 Rs2,570 Rs1,921 Rs2,149 Rs 4,109

Bhopal 51.3% 53.9% ID 62.3% 59.6% Rs1,251 Rs1,288 ID Rs1,145 Rs 1,677

Chennai 58.7% 75.1% 65.0% 63.9% 61.6% Rs2,229 Rs2,118 Rs1,936 Rs2,048 Rs 2,061

Cochin 68.5% 68.2% 58.7% 57.6% 69.0% Rs961 Rs816 Rs1,306 Rs1,089 Rs 1,368

Coimbatore 55.7% 56.4% ID ID 64.5% Rs1,581 Rs1,366 ID ID Rs 1,407

Darjeeling ID 26.3% 28.2% ID 62.6% ID Rs671 Rs1,630 ID Rs 1,902

Goa 49.6% 57.1% 56.1% 60.2% 65.3% Rs2,097 Rs2,174 Rs1,756 Rs1,982 Rs 2,147

Hyderabad 62.1% 71.4% 67.2% 71.0% 72.8% Rs1,553 Rs1,842 Rs1,131 Rs2,049 Rs 2,406

Indore 53.6% 65.1% 77.5% 64.7% 61.4% Rs748 Rs874 Rs850 Rs782 Rs 521

Jaipur 49.2% 52.3% 56.2% 56.9% 62.6% Rs1,526 Rs2,051 Rs1,543 Rs1,289 Rs 1,628

Jodhpur 44.5% 34.7% 32.5% 37.4% 45.9% Rs1,861 Rs2,117 Rs1,290 Rs1,561 Rs 1,226

Kolkata 52.9% 66.7% 61.7% 63.6% 64.6% Rs2,400 Rs2,465 Rs1,417 Rs1,342 Rs 2,520Kullu-Manali 33.3% 44.4% 39.8% ID 34.5% Rs808 Rs760 Rs1,498 ID Rs 1,964

Mount Abu ID ID 42.1% 38.1% 51.8% ID ID Rs980 Rs922 Rs 1,084

Mumbai 59.5% 66.1% 63.8% 62.6% 66.3% Rs3,872 Rs3,591 Rs2,075 Rs1,822 Rs 3,063

Mussoorie 44.9% 52.9% ID ID 70.0% Rs1,215 Rs1,766 ID ID Rs 2,685

Mysore 55.9% 52.5% ID 51.1% 34.8% Rs1,029 Rs660 ID Rs1,120 Rs 878

New Delhi 60.1% 59.3% 55.9% 58.3% 69.1% Rs4,616 Rs3,911 Rs3,434 Rs2,918 Rs 4,247

Nagpur ID 55.0% 60.0% 57.2% 51.3% ID Rs643 Rs1,113 Rs1,032 Rs985

Pune 58.3% 58.1% 58.0% 59.9% 62.1% Rs1,357 Rs2,036 Rs1,044 Rs1,141 Rs1,820

Shimla 28.4% 48.1% 43.6% 46.7% 45.0% Rs1,578 Rs1,062 Rs1,578 Rs1,022 Rs 2,080

Thiruvananthapuram 41.1% 57.0% 55.4% 60.3% 51.1% Rs1,459 Rs1,153 Rs966 Rs983 Rs 1,302

Udagamandalam (Ooty) ID ID 38.0% ID 48.8% ID ID Rs947 ID Rs 1,609

Udaipur 41.2% 44.0% 44.3% 46.6% 45.7% Rs1,526 Rs3,402 Rs1,924 Rs1,644 Rs2,473

Varanasi 39.3% 46.9% ID ID 52.0% Rs1,576 Rs1,585 ID ID Rs 813

Vadodara ID 58.0% 43.5% 46.4% 62.5% ID Rs1,116 Rs1,039 Rs1,110 Rs458

Visakhapatnam 63.8% 65.6% 56.6% ID 70.1% Rs933 Rs877 Rs1,184 ID Rs 1,293ID - Insufficient DataNote: HVS will like to clarify that the increase represented in terms of occupancy percentages and average rates is partly a result of larger hotels participating in the survey.

This increase in rates and overall efficiencies has resulted in certain cities showing much stronger market conditions.

Average Occupancy Average Rate



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In 2003-04, Bangalore was the market leader in terms of occupancy, registering occupancyof 789% Hyderabad achieved the second-highest occupancy at 728% New Delhi hadthe highest average room rate (ARR) among the 30 cities, with an ARR of Rs 4,247Bangalore was the second highest, registering an ARR of Rs 4,109

All India average occupancy was 597%, an increase of 49% occupancy points above theprevious year's level, or 90% in real terms All India Average Room Rate increased by342% over the previous year

Occupancies ranged between 465% for heritage hotels to 680% for five-star deluxe hotelsAverage rates showed a much greater spread, from Rs 4,447 for five-star deluxe hotels toRs 503 for one-star hotels, an increase of Rs 627 and decrease of Rs 34, respectively, fromthe previous year

The All India average revenue per available room (RevPAR) increased substantially, fromRs 1,098 in 2002-03 to Rs 1,605 in 2003-04, reflecting an increase of 462%

Rooms revenue, generally considered to be the most important source of a hotel's overallprofitability, represented 542% of total revenue across all hotels (an increase of 34%from 2002-03) .ood & Beverage (.&B) revenue represented 296% of total revenue acrossall hotels (a decrease from 313% last year)

Rooms revenue was 547% of total revenue for five-star deluxe hotels, 571% of totalrevenue for five-star hotels and 531% for four-star hotels

The All India average of Rooms department expense as a percentage of Rooms revenuedeclined from 207% in 2002-03 to 178% in 2003-04

Key Operating Characteristics

COMPOSITION

Five-Star

Deluxe Five-Star Four-Star Three-Star Two-Star One-Star Heritage Others

2003-2004

All India

Average

Number of responses: 34 25 42 152 98 45 36 52 484

Average Total Rooms Per Hotel: 235 122 94 57 39 35 35 34 82

Average Occupied Rooms Per Hotel: 56,554 30,128 22,341 11,740 8,294 7,862 5,790 6,443 18,435

Average Occupancy Per Hotel: 68.0% 65.9% 62.5% 56.4% 58.3% 65.1% 46.5% 60.8% 59.7%

Average Rate Per Hotel: Rs 4,447 Rs 2,742 Rs 2,075 Rs 1,292 Rs 792 Rs 503 Rs 2,480 Rs 643 Rs 2,689

Average Revenue Per Available Room (RevPAR): Rs 3,024 Rs1,807 Rs1,297 Rs729 Rs462 Rs327 Rs1,153 Rs391 Rs1,605

Net Income (After Operating & Overhead Expenses, before Depreciation, Interest Payments & Taxes)

- As a Percentage of Revenue 33.5% 29.6% 29.2% 20.3% 16.1% 24.2% 24.9% 21.1% 30.7%

- Per Available Room Rs 662,418 Rs 354,892 Rs 270,052 Rs 109,441 Rs 49,413 Rs 42,701 Rs 209,744 Rs 48,711 Rs 343,622

Breakdown of Revenue - 2003-2004

Rooms

54.2%

Minor Operated

3.4%Rental & Other

Income

2.7%

Food & Beverage

29.6%

Telephone &Other

2.3%

Banquet &

Conferences

7.8%

Departmental Expenses as a Percentage of Revenue -

2003-2004

17.8

47.6

53.7

8.1

55.9

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AsaPercentageofRevenue



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The All India average .ood & Beverage department expense as a percentage of .ood &Beverage revenue declined from 587% in 2002-03 to 559% in 2003-04

Minor Operated department expense as a percentage of Minor Operated department

revenue registered a marginal increase from 527% in 2002-03 to 537% in 2003-04 Total departmental expense as a percentage of total departmental revenue reflected a

decline, from 374% in 2002-03 to 337% in 2003-04 The decline has been witnessed forthe first time since 1999-2000 (353%)

.ood and Beverage expense, at 559% of total revenue, was the highest departmentalexpense The segment of luxury hotels, which are generally branded, did a far better jobof controlling costs, than other categories of hotels

Technology in hotels continues to improve each year and we predict a steady growth inits use in various areas of hotel operations

Of particular interest are the increased trends in utilization of the intranet and e-mailsystems by hotels and usage of CRS and websites as distribution channels Increasedusage of yield management systems and energy management systems was also notedThe table below depicts a comparison of the percentage of hotels using each technology,during the period 1999-2000 to 2003-04

.ive-star deluxe, five-star and four-star hotels witnessed overall increase in utilization ofyield management systems over the three-year period between 2001-02 and 2003-04

However, three-star hotels registered the greatest increase: 14%, 16% and 22% in 2001-02,2002-03 and 2003-04, respectively



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The maximum increase in utilisation of energy management systems is seen by hotels inthe five-star deluxe category, from 30% in 2001-02 to 50% in 2002-03 and 65% in 2003-04This reflected in reduction in energy costs: from Rs 923 POR in 2001-02 to Rs 844 POR in2002-03 and Rs 758 POR in 2003-04

Significantly, increase in use of energy management systems has also been witnessed bythree-star hotels, reflecting the efforts being made by this segment to link energyconservation with profitability

Direct enquiry continues to be the main source of advance reservations at hotels in India(550%), followed by travel agents and tour operators (209%) Interestingly, the use ofthe online reservation system increased to 37% compared to 22% in the previous year,and CRS utilization increased to 52% from 43% GDS utilization increased marginally to15% in 2003-04, from 14% in the previous year Also, the use of hotel websites as a sourceof advance reservations increased to 48% from 46%

Domestic guests continue to be of importance across all hotels in India, accounting for750% of all guests in 2003-04 (769% in 2002-03)

Domestic business travellers represented the largest percentage of hotel guests (369%)

Percentage of foreign guests increased to 250% in 2003-04, compared to 231% in 2002-03,primarily as the percentage of foreign business travelers grew Of the foreign guests, the UKprovided the largest demand, at 160%, followed by USA, at 127%, and Germany at 76%

The percentage of foreign business travellers increased to 95% of all hotel guests from74% in the previous year .oreign business travellers in the five-star deluxe market reflectedan increase from 217% in 2002-03 to 270% in 2003-04

.oreign guests prefer luxury and heritage hotels; however, there was a decrease in foreignleisure travellers and tour groups in both these segments The decline was more markedin the case of heritage hotels: foreign leisure travellers and tour groups comprised 164%and 132%, respectively, of the market for heritage hotels in 2003-04, against 222% and189% in 2002-03

Energy expenses on per occupied room basis increased from Rs 485 in 2002-03 to Rs 523 in2003-04 The increase was concentrated in the heritage segment, with an increase of Rs 55per occupied room, from Rs 572 in 2002-03 to Rs 627 in 2003-04

Cash sales (including cheques/demand drafts), remain the most popular method of settlingbills in India (accounting for 444% of all sales) The dependence on cash sales is decliningslowly: cash sales were 484% of all sales in 2002-03 Correspondingly, credit cardtransactions increased from 277% to 304% in 2003-04 In the luxury segment of five-stardeluxe, credit cards remained the most popular method at 464%

Credit sales (other than credit cards), increased from 225% (All India average) in 2002-03to 241% in 2003-04 This increase was primarily in five-star and heritage hotels, perhapsdue to travel agent and company related billings Interestingly, leisure and group related

business, both domestic and foreign, decreased in both these segments

Visa (414%) was the most widely used credit card by hotel guests in 2003-04, followed byMastercard (360%) American Express has the highest collection charges



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Change in Performance Ratios: 2003-04 over 2002-03

The table above compares the results of our survey in 2003-04 with the previous year In2003-04, RevPAR increased in all categories except one-star Heritage hotels and five-stardeluxe hotels experienced the highest increase in RevPAR 621% and 325%, respectively

Average occupancy per hotel increased in all hotels, with heritage hotels showing thegreatest increase (96%)

Average room rate increased in all categories along with higher occupancy (except the

one-star and non-classified segments), reflecting the positive demand experienced by theentire market through the year The lower average rates in the one-star and non-classifiedcategory may be attributed to a scenario of higher room supply in some cases andcompetitive discounting in all cases

Luxury hotels monitor environmental issues most closely Solid waste production is beingmonitored by 285% of hotels, compared to 231% the previous year

In 2003-04, as in preceding years, hotels monitored electricity consumption more closelythan other fuels and environment components such as water and air Hotels monitoredenergy consumption (electricity) to the extent of 957% This was followed by energyconsumption (gas) at 858% and water consumption at 844%

In 2003-04, hotels increased the monitoring of chemical usage by housekeeping at 791%Staff training in environmental issues increased to 483% from 444% in 2002-03

Energy expenses accounted for 105% of total revenue as compared to 123% last yearThis category of expense (as a percentage of total revenue) continues to be much higherin India, when compared to other countries (USA: 38%)

Five-Star

Deluxe Five-Star Four-Star Three-Star Two-Star One-Star Heritage Others

All India

Average

Average Occupancy Per Hotel: 8.3% 9.1% 7.1% 3.7% 1.8% 3.2% 9.6% 4.2% 4.9%Average Rate Per Hotel: 16.4% 0.7% 5.4% 10.8% 2.1% -6.3% 28.5% -4.1% 34.2%

RevPAR 32.5% 16.8% 18.9% 18.6% 5.4% -1.4% 62.1% -3.1% 46.2%

* Some changes may have occurred due to a different mix of hotels participating in our survey

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ndherbi

cides

(Pub

licAr

ea)

Waste

Water

quali

ty

Waste

Water

volum

e

Water

cons

umpti

on

Percentage

ofHotel

s



14/61

Trends & Opportunities in the Indian HotelIndustry

Introduction

In this section, we seek to draw attention to some broad industry characteristics and presentcertain marketwide trends over the last few years This being the seventh edition of the IndianHotel Industry Survey, we are in a position to analyse survey results for the last seven yearsand provide a historical trend for the users of this report

We have also attempted to provide brief market analyses for 19 cities, under 'City Trends' Thecity analysis reflects HVS International's market perception for each city, as well as our

expectations with regard to its performance in the current year (2004-05)Indian Hotel Industry - Size and Category

Hotels in India are categorised into two main types: approved and unapproved The Ministryof Tourism, Government of India, grants approval to hotels at the project stage and then classifiesthem into one of the star categories This approval status is voluntary; however, only approvedhotels can avail of the various income tax incentives, import licenses and other approvals Thefollowing table lists the number of .HRAI member hotels in different categories in the last sixyears Nearly all the five-star deluxe, five-star, four-star and three-star hotels in the country aremembers of .HRAI, although membership is not so comprehensive in lower star categoriesThe majority of hotels and hotel rooms in India are included in the unapproved type, as manyhotels, especially those that are equivalent to lower star category hotels, do not take part in theGovernment classification process Presently, .HRAI has 477 unapproved hotels (with 18,796rooms) as its members, of a total membership of 1,777 hotels (with 98,515 rooms)

Avg Annual

Rooms Growth

Category Hotels R ooms Hotels Rooms H otels Rooms Hotels Rooms Hotels R ooms Hotels Rooms (1999-2004)

Five-Star Deluxe 41 10,574 57 12,556 65 14,959 68 15,672 68 16,050 74 17,903 11%

Five-Star 59 8,028 73 9,051 72 8,513 72 8,662 72 8,669 71 8,554 1%

Four-Star 77 5,586 92 7,232 99 7,791 100 7,614 102 7,408 104 7,355 6%

Three-Star 256 13,231 379 19,785 402 20,691 413 21,387 409 21,098 414 21,433 10%

Two-Star 208 8,023 244 9,135 263 9,958 234 9,278 226 8,903 221 8,639 1%

One-Star 49 2,472 46 2,253 50 2,428 48 1,696 44 1,520 43 1,480 -10%

Heritage 34 965 66 2,372 73 2,551 71 2,492 67 2,258 69 2,297 19%

Approved (Unclassified) 112 6,009 263 10,560 303 12,318 308 12,515 297 11,921 304 12,058 15%

Un-approved 836 31,486 493 18,350 472 17,757 455 17,925 452 17,895 477 18,796 -10%

Total 1,672 86,374 1,713 91,294 1,799 96,966 1,769 97,241 1,737 95,722 1,777 98,515 3%

200420032002200120001999




15/61

Indian Hotel Industry-Revenue and Profitability-Average Per Hotel

All India average revenue has grown substantially from Rs 518 crore during 2002-03 toRs 915 crore during 2003-04 and is expected to see significant improvement in the nextfew years

House Profit (Gross Operating Profit after deducting franchise and management fees) asa percentage of revenue increased from 292% in 2002-03 to 348% in 2003-04 This is thesecond successive year that House Profit has shown upward growth

The All India average Net Income (Net Income before depreciation, interest payments

and taxes) also increased, from Rs 195 crore (249%) in 2002-03 to Rs 280 crore (307%) in2003-04, reflecting overall improvement in the industry

The number of hotels having a training department increased in all star categories, withthe All India average being 258% compared to 199% in 2002-03 .ive-star deluxe hotelshad the highest percentage of hotels with a training department There has been an

increase in the number of three-star hotels with a training department: 243% in 2003-04compared to 210% in the previous year This reflects the growing importance being paidto employee retention and productivity enhancement through training



16/61

December, followed by November and .ebruary, was the busiest month in 2003-04Average occupancy was at its highest in December at 671%, while November and .ebruaryregistered average occupancy of 659% and 632%, respectively June through Augustwas the slowest period, with August witnessing the lowest occupancy ( 521%)

While print advertising continues to be the most popular marketing medium used byhotels across India (930%), there has been an increase in the use of hotel websites aseffective marketing media, across all segments of hotels Direct mail is also the preferredmarketing media for all categories, with an increase in utilisation to 814% from 788% inthe previous year

Use of telemarketing as marketing media has increased, particularly in the three-starsegment Although the utilisation of loyalty card programmes has increased from 279%to 310%, there is decline in its usage by five-star deluxe and five-star hotels, possibly dueto saturation in the market, with hotels targeting the same customer profile

Interestingly, radio advertisement and television advertisements have grown in use asmarketing media during 2003-04 .ive-star deluxe, five-star and four-star hotels used thismode of marketing the most, particularly for .&B promotions and weekend or holidaypackages



17/61


18/61

City Trends

The year 2003-04 was a period of considerable buoyancy and upswing for the hotel industry inIndia Most cities saw occupancy levels improve over the previous year and, for the first time in

six years, both occupancy and average room rates improved The following paragraphs detailour expectations of new supply and performance for 19 important hotel markets, based onresearch undertaken and forecasts made by HVS International

New Delhi:

Occupancy witnessed a growth of 103% in 2003-04 Average rate increased after a five-yeardecline, registering a growth of 455% from the previous year However, the large growth maypartly be attributed to increases in ARR experienced by survey respondents in the brandedhotels category, and those with a larger rooms base

The central and state governments are encouraging hotel development in all categories, andparticularly in the mid-market segment, in preparation for the Commonwealth games to beheld in the city in 2010 The National Capital Region is expected to see the development of

approximately 17 hotels in various categories over the next three to four years, withapproximately 11 new hotels to be in Gurgaon Due to strong demand, we anticipate occupancyand average rate to grow over the next few years before this new supply comes in This will besupported by significant infrastructure development in terms of roads and transportation andthe (proposed) privatisation of the airport The development of new convention centre facilitiesin New Delhi, as and when this takes place, will further boost room night demand

Mumbai:

Citywide occupancy in Mumbai increased by 37%, and average rate registered an increase of681% in 2003-04 This sharp rise in ARR is, as in the case of Delhi, due to the increase in theaverage rate of the larger hotels, which formed a higher percentage of the total respondentsthis year Mumbai continues to experience a large surge in demand for hotel rooms, primarily

in north Mumbai; however, south Mumbai has also seen demand growth during 2003-04 Weexpect room night demand to strengthen significantly in the next couple of years Averagerates will also increase, especially in the north Mumbai market

The long-term outlook for Mumbai is positive: we estimate occupancy to grow in 2004-05 asdemand continues to outpace supply, despite the opening of a new hotel by the ITC group inParel, and the Grand Hyatt in the Bandra Kurla vicinity commencing full operations Hotels inthe luxury segment, such as the .our Seasons brand, are expected to enter the market in 2006However, with not much other hotel construction ongoing, the market can hope to see significantgain Infrastructure improvements are taking place in terms of road and highway developmentand the Mumbai airport is also currently under renovation

Kolkata:

In 2003-04, Kolkata witnessed 10% increase in occupancy over the previous year, despite largeincrease in supply in the city The average rate also increased during the same period Thisincrease in average rate was realised by hotels in all segments We expect that room nightdemand in Kolkata will grow, although at a lower rate than other metro cities in the country,and that average rates will increase and stabilise in the next one year With no new supplyexpected to enter the city in 2004-05, occupancy will witness an increase and average rates willalso rise over the previous year's levels Occupancy and average rate will benefit from therising number of units providing BPO and IT services in Salt Lake Infrastructure developmentin the Rajarhaat area, and an increase in transit business due to the development of north-eastIndia as a leisure destination, will positively impact the Kolkata hotel market Hotel performancein Kolkata will also benefit from the city's increased viability as a conference destination

Pune:

Occupancy and average rate in Pune registered an increase over the previous year Citywideoccupancy grew 22% in 2003-04 and the average rate increased by 595% In Pune as well, a



19/61

larger percentage of the survey participants this year were from the luxury segment, thuscontributing to the sharp rise in average rate We expect the Pune hotel market to witnesssignificant upward growth in 2004-05, as IT and BPO companies continue to shift base to Punein view of the skilled manpower available, relatively lower cost of corporate office space, and

the city's background as an educational centreChennai:

Chennai witnessed occupancy decline of 23%, for the second consecutive year Average ratesincreased marginally by 06% We expect occupancy and average rate to experience growth in2004-05 This will be supported by improvements at the airport and in the airport's vicinity Wealso believe that certain hotel projects, on which work had been discontinued, will be completedand new supply will enter the market in the next few months

Bangalore:

Bangalore's hotel market grew by 66% in terms of occupancy and 912% in terms of the averageroom rate This high increase may also be due to more luxury hotels responding to the surveyBangalore is, according to some industry observers, the best hotel market in Asia at present It

must, however, be noted that Bangalore's infrastructure has not been able to keep pace withthe rapid growth in the city's population and in arrivals Infrastructure-related inadequaciesmay negatively affect Bangalore's growth as a hotel market No significant new supply is likelyto be added in the current year As occupancy levels in the city range above 80% and almost allweekdays are sold out, we expect significant rise in average rates for all hotels, with no newsupply expected until 2006 We expect this rise to continue, before reducing over the next three-four years, as at least nine new hotels are to enter the Bangalore market

Goa:

In Goa, overall occupancy increased by 51% Average rates also registered an increase of 83%over the previous year The city has seen a 238% growth in room supply in 2003-04 in the five-star and above hotel category The increase in supply has been absorbed, due to strong growth

in room night demand which, in turn, has benefited from keen efforts by the Ministry of Tourismand the state government to promote Goa as a destination At present, no significant hoteldevelopment is being planned for Goa The opening of the charter sector has and is furtherexpected to result in positive development for Goa

Ahmedabad:

.ollowing a decrease in 2002-03, Ahmedabad saw occupancy rise by 53% in 2003-04 and averagerates increase by 152% We anticipate the market to further recover in 2004-05, in keeping witha lessening of communal tensions Gujarat, despite the negative publicity that it received dueto riots, remains a state where business is doing well Ahmedabad, being one of the main citiesof business in the state, stands at the forefront

Cochin:

The overall occupancy in Cochin increased strongly by 115% in 2003-04 Average rates registeredan increase of 256%, due to a larger number of respondents in the four-star category Theupward trend in occupancy and average rate was mainly witnessed in the domestic businesstraveller segment We expect occupancy levels and average rates to improve in 2004-05 as Cochin,an important commercial city in Kerala, will benefit from increased leisure travel to the stateThis is especially in view of the active efforts being made, both by the Kerala government andthe union ministry of tourism, to market Kerela as a destination, particularly for Ayurveda andfor health tourism

Jaipur:

Occupancy levels increased by 57% in 2003-04 and average rates increased by 263% over theprevious year Despite new and increased supply, the market is expected to improve further in2004-05 The 'Pink City' also attracted the largest number of foreign tour groups among all citiesstudied Moreover, with tourist arrivals into India to grow over the next two to three years,



20/61

demand in Jaipur is projected to increase The state government is giving tourism top priority,and infrastructure for tourism-related activities is being improved in Rajasthan IT related activityand conferences and conventions would also grow, along with the development of Jaipur'sairport into an international airport, thus boosting business-related room night demand

Hyderabad:The Hyderabad hotel market continued to show improvement in 2002-03 and 2003-04 In 2003-04, average city occupancy was 729%, a 19% growth over the previous year's level Averagerates grew by 174% We estimate that, with no significant new supply expected in the next fewyears, average rates will increase significantly Hyderabad is also expected to see increased andsustained growth in 2004-05, particularly due to the IT industry Interest has been shown in thecity by both large multinational and domestic companies, particularly in this sector

Nagpur:

Nagpur witnessed a decline in occupancy of 59% and a decrease in average rates of 46% fromthe previous year This may be due to a different mix of hotels among the respondents HVSInternational has not tracked this market in the past

Bhopal:

Bhopal witnessed a decline in occupancy by 27% and a 465% increase in average rate over theprevious year This increase in average rate is mainly because higher rated heritage hotels have

been included in the survey group for this city

Thiruvananthapuram:

The city has witnessed a decrease in occupancy of 92%, and a growth in average room rates of323% The decline could also be due to a difference in the mix of responding hotelsThiruvananthapuram is expected to benefit as inbound tourism to Kerala increases over thenext couple of years

Vadodara:

We have not been able to track the trend in this city, as we were unable to get adequate responsesfrom the hotels in the city

Udaipur:

Citywide occupancy decreased by 09% in 2003-04 Average rate, on the other hand, showed asteep increase of 504% We expect that, like Jaipur, Udaipur will see an increase in both occupancyand rates in 2004-05, as overall tourist arrivals in Rajasthan are expected to grow substantially inthe next couple of years and the state government gives strong impetus to tourism growth

Agra:

The city saw occupancy and average rate grow in 2003-04 after a steady decline in the threeprevious years The occupancy increased by 54% and the average rate increased by 744%

Increased response to the survey from five-star deluxe and five-star hotels has resulted in astrong increase in average rates The meetings segment, particularly of groups of over 100participants, grew from 53% the previous year to 215%, indicating Agra's growth as a conferencedestination

Indore:

.or the second year in a row, Indore witnessed a drop in occupancy: this time by 33%, as wellas a 334% decrease in average rates HVS is not familiar with the recent trends in the city tocomment upon the decline, which could also be due to a different mix among the respondinghotels as compared to the previous year

Shimla:

Shimla registered a decline of 17% in terms of occupancy levels in 2003-04 Average rates,however, grew from the previous year As disposable income across India improves due to theeconomy, we can expect leisure markets like Shimla to see improvement in their performance



21/61

New Supply of Hotels

Since 1997, HVS International has maintained its own database of new supply into importanthotel markets in India The graph below highlights the 95 hotels under active development invarious cities, of which HVS International is currently aware It is important to note that mostHVS data for new supply represents branded properties It is also quite likely that a largenumber of hotels are in the early stages of planning and/or development New economy segmenthotels are being promoted by some leading hotel chains in the country, which have not beenaccounted for in this survey

We are of the opinion that demand for hotels has risen across nearly all cities, in the currentfinancial year (April 2004 - March 2005) Leading the growth in demand are Bangalore, Delhi,Mumbai, Hyderabad, Jaipur, Goa, Pune and Chennai At present HVS's opinion is that probablyall the cities mentioned above will readily absorb all the rooms under development and therewill be a major shortage of rooms over the next 3-4 years

What the .uture Holds

The current year has been a fantastic year for tourism recovery in the Indian region We haveenjoyed the best year in terms of tourism arrivals, the economy remains relatively strong andhas among the highest rates of GDP growth in the world At many forums across the globeIndia remains the current flavour of the day

The year 2003-04 has been a year of consolidation and gains for the hotel industry in India,both in terms of room night demand and average rates Taking into account the bullish trendpresently witnessed in the industry, together with an overall positive outlook on the Indianeconomy, 2004-05 will be a record year in terms of hotel performance across nearly all cities inthe country As expected, the Indian hotel market is already generating serious interest frominternational operators and hotel developers HVS International is aware that, at present, certain

international hospitality funds and a few new operators are exploring the Indian markets forboth investment and operating opportunities Also, according to us the biggest boost to thehotel industry is going to come from the current on-going process of open sky policy and alsothe fact that Indian private airlines will be allowed to fly to various regions across the globeThis along with improved airports will certainly continue to bolster demand for hotel roomnights

Number of New Hotel Developments

0

2

4

6

8

10

12

14

16

18

Agra

Ahm

edab

ad

Coim

bato

re

Bang

alor

e

Chen

nai

Delhi (

NCR)

Goa

Hyder

abad

Jaip

ur

Jodh

pur

Kolk

ata

Luck

now

Ludh

iana

Mumba

i

Pune

Udaip

ur

Vish

akap

atnu

m

Source: HVS International Research

No. of hotels



22/61

1. Indian Hotel Industry by Star Category

In this section, we have analysed hotel performance by star classification An overall total of1,109 hotels participated in our survey for 2003-04 The hotels have been classified into theeight star categories available in India (see tables 1-1 to 1-10), and their responses analysedaccordingly In order to be fair to the approved hotels that are awaiting classification, we havecombined them with their expected star category "Unapproved" hotels have been put underthe "Others" category

To provide further interesting comparisons, we have included a column for All India totalsacross all star categories Each section includes the total number of respondents for eachcomponent of the survey, allowing the reader to judge the validity of the data received

The layout has been standardized in each section to enable consistency throughout the entiredocument All figures pertain to 2003-04, and monetary figures are in Indian Rupees The USdollar conversion rate can be taken at 1US$ = Rs460 (conversion rate for the period 2003-04)

Table 1-1: presents a typical facilities analysis including rooms configuration, .&Boutlets, a subdivision of employees into managerial, supervisory and staff positionsand a breakdown of trained and total employees;

Table 1-2: presents the individual revenue and expense components as a percentageof revenue;

Table 1-3: presents financial statements on a PAR (per available room) basis;

Table 1-4: presents financial statements on a POR (per occupied room) basis; Table 1-5: presents market data including market segmentation, guest analysis and

the country of origin of guests;

Table 1-6: presents a monthly and daily occupancy analysis;

Table 1-7: presents the sources of reservations of hotel rooms;

Table 1-8: presents the use of various forms of marketing media;

Table 1-9: presents an analysis of payment methods and the use of credit cards;

Table 1-10: presents the technology used and environment-related issues and practices




23/61

TABLE 1-1: Indian Hotel Industry by Star Category - .acilities Analysis and Staffing

Average Number of Food & Beverage Outlets Per Hotel

COMPOSITION

Five-Star

Deluxe Five-St ar Fo ur-St ar T hr ee -Star Tw o-St ar One -Star H er it age Other s

2003-2004

All India

Average Number of responses: 34 30 64 251 189 54 36 160 818

Restaurant 3.6 2.3 1.9 1.6 1.3 1.2 1.5 1.4 1.6

Bar 1.4 1.2 1.1 0.8 0.6 0.2 0.8 0.5 0.8Others 1.1 0.8 0.6 0.8 0.3 0.1 0.4 0.2 0.6

Total 6.1 4.3 3.7 3.2 2.2 1.5 2.7 2.2 2.9

Average Number of Total Employees Per Hotel (Permanent / Contract / Full Time / Part Time)

COMPOSITION

Five-Star


2003-2004

All India

Average


Managers Male 40.3 20.8 12.3 5.3 2.2 1.8 3.0 2.6 6.3

Female 11.8 5.5 2.4 0.6 0.2 0.1 0.3 0.4 1.2

Supervisors Male 49.1 27.4 16.2 7.8 4.0 3.6 4.7 3.7 8.7

Female 11.3 4.8 2.6 1.1 0.3 0.4 0.7 0.9 1.5Staff Male 275.4 144.0 113.3 59.2 31.9 21.3 37.7 22.7 57.7

Female 30.2 11.6 11.0 4.1 1.8 2.0 2.4 1.6 4.7Total 418.0 214.1 157.9 78.1 40.5 29.2 48.8 31.8 80.3

1.9 1.7 1.8 1.6 1.1 0.9 1.5 0.9 1.5Average Number of Employees Per Room

Average Percentage of Trained Employees Per Hotel

COMPOSITION

Five-Star


2003-2004

All India

Average


Managers 93.5% 84.8% 83.9% 90.6% 92.1% 40.0% 87.4% 80.7% 88.5%

Supervisors 86.2 76.2 64.5 76.6 73.5 71.4 88.2 76.3 76.1

Staff 75.0 59.6 59.2 60.8 50.8 71.3 64.0 49.3 61.1

Total Avg. Trained Employees* 84.9 73.5 69.2 76.0 72.1 60.9 79.8 68.7 75.2

Total Avg. Un-Trained Employees 15.1 26.5 30.8 24.0 27.9 39.1 20.2 31.3 24.8

Hotels with Training Department 95.7% 50.6% 40.4% 24.3% 14.5% 1.7% 32.2% 2.5% 25.8%

** Trained employees includes those with a minimum one year certificate course in an educational institute, however some hotels may have included these with short term(in house) training.

Typical Room Profile of an Average Hotel

COMPOSITION

Five-Star


2003-2004

All India

Average


Air-Conditioned Single 50.1 23.4 21.7 4.3 2.5 1.6 2.6 1.5 5.6

Double 154.9 101.7 65.6 32.6 18.4 9.4 18.5 16.0 33.5Suites 21.2 8.7 6.1 4.8 2.7 1.4 4.9 2.4 4.5

Non-Air-Conditioned Single 0.0 0.0 0.0 2.2 2.0 4.1 0.8 2.3 1.6

Double 1.2 2.8 2.9 6.9 9.7 15.2 6.1 13.2 8.8

Suites 0.0 0.2 0.1 0.6 1.1 1.1 2.6 1.2 0.9

Total Average Rooms 227.4 136.8 96.5 51.3 36.3 32.7 35.5 36.6 54.8

* The number of non air-conditioned rooms in lower star category hotels appears to be higher, partly because many are located in hill stations where air-conditioning is notprovided in hotels.



24/61


25/61


26/61

TABLE

1-

4:IndianHotelIndustrybyS

tarCategory-.inancialReport-AmountPerOccupiedRoom

COMPOS

ITION

Number

of

responses:

Av

erage

To

tal

Rooms

Per

Ho

tel:

Av

erage

Occu

piedRooms

Per

Ho

tel:

Av

erage

Occu

pancy

Per

Ho

tel:

Av

erage

Ra

teP

er

Ho

tel:

REVENUE

Rooms

Foo

d&B

everage

Banquet

&Con

ferences

Te

lep

hone

&Other

Minor

Op

era

ted*

Ren

tal&

Other

Income

To

tal

DEPARTM

ENTALEXPENSES

Rooms

Foo

d&B

everage

Te

lep

hone

&Other

Minor

Op

era

ted*

Ren

tal&

Other

Income

To

tal

DEPARTM

ENTALINCOME

OPERATI

NGEXPENSES

Adm

inistra

tive

&Genera

l

Managem

en

tF

ee

Marke

ting

Franc

hise

Fees

Property

Opera

tions

&Ma

intenance

Energy

To

tal

HOUSEP

ROFIT

FIXEDEX

PENSES

Property

Taxes

Insurance

Other

Fixe

dE

xpenses

Ren

tTo

tal

NETINCOME**

Five

-Sta

r

De

luxe

34 235

56

,554

68

.0%

Rs

4,4

47

Rs

4,4

47

2,3

10637

214

344

178

8,1

30766

1,6

14 73150 12

2,6

15

5,5

15630

204

322 30

462

758

2,4

06

3,1

09 71 56155 74

355

Rs

2,7

53

Five

-Star

25

122

30

,128

65

.9%

Rs

2,7

42

Rs

2,7

42

1,3

68

277

104

142

169

4,8

03

511

883

61

90

10

1,5

55

3,2

57

464

114

191

15

291

538

1,6

13

1,6

44

79

27

23

73

202

Rs

1,4

42

Fou

r-Star

42 9

4

22

,341

62

.5%

Rs

2,0

75

Rs

2,0

75

1,1

58

424

67

74

108

3,9

07

282

853

43

76 5

1,2

59

2,6

48

375

70

108

17

313

484

1,3

66

1,2

82

39

23

49

31

141

Rs

1,1

40

Three

-Star

152 5

7

11

,740

56

.4%

Rs

1,2

92

Rs

1,2

92

953

227

33

50

90

2,6

45

275

729

34

36

21

1,0

95

1,5

50

234

44

73 5

202

359

917

633

22

11

44

20

98

Rs

535

Tw

o-S

tar

98 3

9

8,2

94

58

.3%

Rs

792

Rs

792

486

49

23

12

43

1,4

06

236

376

32

2 6 8

678

728

115

46

2 2 1

69

169

422

305

1 4 5

40

14

72

Rs

233

One

-Star

45 3

5

7,8

62

65

.1%

Rs

503

Rs

503

107 11 1 3 9

135

779

115

109 18 14 17

273

506 5 2 73 2 0 90 97

279

227 1 1 21 7 8 38

Rs

188

Heri

tage

36 3

5

5,7

90

46

.5%

Rs

2,4

80

Rs

2,4

80

1,7

26

411

64

198

165

5,0

44

418

1,1

69

65

171 8

1,8

31

3,2

13

596

83

170

27

320

627

1,8

23

1,3

90

16

23

32

61

132

Rs

1,2

57

Others

52 3

4

6,4

43

60

.8%

Rs

643

Rs

643

431

102

17

20

17

1,2

30

179

344

23

29

13

588

642

78

12

66 0

62

134

352

291 6 4 2

20

32

Rs

259

200

3-2

004

A

llIn

dia

A

verage

484 8

2

1

8,4

35

59

.7%

Rs

2,6

89

Rs

2,6

89

1,4

71

388

112

170

134

4,9

65

479

1,0

40

53

91

14

1,6

74

3,2

91

418

114

180

17

309

523

1,5

62

1,7

29

49

30

79

48

207

Rs

1,5

21

*Minoropera

teddepar

tmen

tsinc

lude:

laun

dry

,g

ift

shop

,b

us

ines

scen

tre

,n

ewss

tan

d,s

por

ts,h

ea

lthc

lub

,g

arage

,p

arkingan

dso

for

th

**Ne

tInc

ome

isbe

fore

deprec

iation

,in

teres

tp

aymen

tsan

dtaxes



27/61

TABLE 1-5: Indian Hotel Industry by Star Category - Market Data

Market Segmentation

COMPOSITION

Five-Star

Deluxe F ive -S ta r Fo ur- St ar Three -S tar Tw o- St ar O ne -S tar H erit ag e Ot he r

2003-2004

All India


Airline Crew 7.1% 4.1% 1.2% 0.8% 0.6% 0.3% 1.1% 0.2% 1.3%Business Traveller - Domestic 21.8 26.8 39.0 38.7 44.6 41.9 16.7 39.9 36.9Business Traveller - Foreign 27.0 18.6 11.4 6.0 8.5 3.7 11.7 7.5 9.5Complimentary Rooms 1.8 1.4 1.8 2.2 1.6 1.2 1.8 1.6 1.8Domestic - Tourists/Leisure FIT 8.4 13.8 14.8 19.0 21.5 29.3 22.0 25.3 19.6Foreign - Tourists/Leisure FIT 10.4 5.6 10.5 8.3 5.5 6.1 16.4 6.4 8.2Meeting Participants (Less than 100 Attendees) 3.9 5.8 3.8 3.9 2.7 3.1 5.1 1.9 3.6

Meeting Participants (Over 100 Attendees) 9.3 6.7 5.8 5.7 3.6 2.4 3.2 5.4 5.3Tour Groups - Domestic 1.6 3.8 4.3 7.5 6.9 6.8 6.0 6.3 6.2Tour Groups - Foreign 5.1 6.3 4.2 5.1 2.5 2.2 13.2 1.8 4.6Other 3.5 7.2 3.4 2.8 2.0 3.2 2.8 3.8 3.2

Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

Guest Analysis

COMPOSITION

Five-Star

Deluxe F iv e- St ar Fo ur-St ar Three -St ar Tw o- St ar O ne -St ar H erit ag e Ot he r

2003-2004All India

Average


Domestic Guests 48.8% 62.8% 69.4% 79.0% 83.1% 84.4% 46.8% 80.4% 75.0%Foreign Guests 51.2 37.2 30.6 21.0 16.9 15.6 53.2 19.6 25.0

Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

Total Business Guests 65.2% 61.8% 67.2% 58.3% 60.6% 49.3% 28.9% 51.7% 58.0%

Total Leisure Guests 34.8 38.2 32.8 41.7 39.4 50.7 71.1 48.3 41.9

Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

Avg. Stay of Domestic Guests (Days) 2.0 1.9 2.5 2.4 2.5 2.7 6.4 2.2 2.6

Avg. Stay of Foreign Guests (Days) 3.1 3.7 4.3 3.1 2.3 3.1 3.3 2.9 3.2

Avg. Stay of Business Guests (Days) 2.0 1.9 2.2 2.1 1.8 2.6 1.6 2.3 2.0

Avg. Stay of Leisure Guests (Days) 3.1 2.2 2.4 2.2 2.8 2.5 1.8 2.0 2.4

Percentage of Repeat Guests 46.7% 37.0% 38.7% 54.3% 38.2% 59.3% 20.0% 45.0% 45.5%

Country of Origin of Guests

COMPOSITION

Five-Star

Deluxe F ive -S ta r Fo ur-St ar Three -S tar Tw o- St ar On e- St ar H erit ag e Ot he r

2003-2004

All India

Average


ASEAN* 4.0% 4.0% 5.5% 7.4% 8.9% 7.5% 1.2% 4.8% 6.1%Australia 2.7 2.5 2.8 2.8 3.9 2.4 5.7 4.2 3.3Canada 2.3 2.3 5.0 3.0 4.1 3.1 2.6 4.3 3.4Caribbean 1.0 0.2 0.3 0.2 0.6 0.4 0.0 0.1 0.3China 1.5 1.7 1.9 2.3 1.7 1.3 1.2 1.2 1.8France 6.8 6.0 6.2 6.2 5.0 3.5 18.1 8.8 7.1Germany 6.6 6.9 7.7 7.8 6.2 5.1 11.7 8.4 7.6Japan 6.5 3.9 7.3 5.1 3.6 6.2 3.2 4.5 5.0Middle East 3.8 4.1 1.6 2.7 6.6 2.8 0.9 3 .9 3.4

Other European 8.5 9.8 5.8 8.3 11.1 5.5 13.5 8.6 8.9Russia 2.9 7.0 5.4 3.1 2.4 2.7 1.9 2.8 3.4SAARC** 4.0 4.6 8.4 8.5 9.6 27.9 1.0 7.5 8.0South Africa 0.8 1.7 2.2 2.0 1.2 2.2 0.6 3.2 1.8UK 17.9 16.7 16.1 16.6 12.4 15.0 20.4 14.2 16.0USA 17.6 12.0 10.4 14.0 11.3 7.0 12.0 11.4 12.7Other 13.3 16.7 13.5 10.1 11.5 7.5 6.0 12.2 11.3

Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

* ASEAN: Association of South East Asian Nations

** South Asian Association for Regional Co-operation - India, Pakistan, Bangladesh, Sri Lanka, Nepal, Bhutan, Maldives



28/61

TABLE 1-6: Indian Hotel Industry by Star Category - Monthly & Daily Occupancy

Average Monthly Occupancy

COMPOSITIONFive-StarDeluxe Five-Star Four-Star Three-Star Two-Star One-Star Her itage Other

2003-2004

All IndiaAverage


January 74.5% 68.0% 67.6% 61.7% 62.5% 65.5% 51.4% 55.1% 63.0%February 79.9 71.2 66.7 61.4 60.5 64.0 56.2 55.2 63.2March 71.4 61.9 58.3 55.0 56.5 55.3 48.3 48.7 56.5April 57.3 56.3 54.5 54.1 57.5 57.6 42.3 50.5 54.5May 53.4 53.1 53.2 57.0 60.2 75.6 39.0 55.4 57.0June 56.5 51.9 50.9 54.7 58.3 59.5 35.2 53.2 54.1July 56.7 51.5 51.6 54.4 54.7 57.0 26.9 49.4 52.4August 57.7 53.5 52.8 50.2 55.3 58.6 36.1 49.6 52.1September 72.4 55.8 69.5 51.5 55.7 60.7 34.9 50.6 55.9October 65.8 59.6 57.4 56.5 59.4 63.2 50.8 56.8 58.3November 78.4 67.0 67.5 66.3 63.7 68.9 57.2 59.0 65.9December 73.6 69.6 72.1 66.0 67.2 71.4 53.8 61.6 67.1

Average Daily Occupancy

COMPOSITION

Five-Star

Deluxe Five-Star Four-Star Three-Star Two-Star One-Star Her itage Other

2003-2004

All India

Average


Monday 64.0% 59.8% 58.3% 52.1% 54.8% 57.2% 35.2% 51.7% 54.4%Tuesday 64.7 62.3 59.5 54.9 55.9 56.0 35.9 52.3 55.9Wednesday 68.5 62.6 61.2 57.4 56.9 57.4 39.7 52.5 57.6Thursday 65.4 62.7 62.8 58.2 59.0 59.7 39.1 55.5 58.8Friday 64.3 60.0 62.0 58.9 58.1 57.1 47.9 53.9 58.5Saturday 61.0 61.0 59.3 52.4 52.6 58.2 52.4 53.8 55.0Sunday 60.7 54.6 55.0 45.2 48.6 54.8 44.4 50.5 49.9

TABLE 1-7: Indian Hotel Industry by Star Category - Sources of Reservations

Source of Advance Reservations

COMPOSITION

Five-Star

Deluxe F ive-Star Four-Star Thr ee-S tar Two-Star One-Star Heri tag e Other

2003-2004

All India

Average


Chain CRS (Central Reservation System) 18.9% 13.4% 7.5% 3.1% 2.2% 1.6% 8.0% 1.6% 5.2%

Direct Enquiry/ Hotel Representative 40.8 47.3 54.4 55.6 61.0 69.9 27.9 63.3 55.0

Global Distribution System (GDS) 6.0 1.9 0.7 1.9 0.6 0.8 0.7 0.1 1.5

Hotel/Chain Web Site 4.8 3.9 3.0 6.0 5.0 1.8 8.8 2.7 4.8Travel Agent & Tour Operator 13.4 22.2 23.8 20.8 16.4 14.0 45.2 21.4 20.9

Other online reservation systems 8.7 5.8 4.3 3.5 2.8 1.4 3.3 2.0 3.7

Other websites 2.9 0.5 1.5 1.6 2.0 0.9 2.8 1.6 1.7

Others 4.6 5.0 4.9 7.5 10.1 9.7 3.3 7.3 7.2

Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0



29/61

TABLE 1-5: Indian Hotel Industry by Star Category - Market Data

Market Segmentation

COMPOSITION

Five-Star

Deluxe F ive -S ta r Fo ur- St ar Three -S tar Tw o- St ar O ne -S tar H erit ag e Ot he r

2003-2004

All India


Airline Crew 7.1% 4.1% 1.2% 0.8% 0.6% 0.3% 1.1% 0.2% 1.3%Business Traveller - Domestic 21.8 26.8 39.0 38.7 44.6 41.9 16.7 39.9 36.9Business Traveller - Foreign 27.0 18.6 11.4 6.0 8.5 3.7 11.7 7.5 9.5Complimentary Rooms 1.8 1.4 1.8 2.2 1.6 1.2 1.8 1.6 1.8Domestic - Tourists/Leisure FIT 8.4 13.8 14.8 19.0 21.5 29.3 22.0 25.3 19.6Foreign - Tourists/Leisure FIT 10.4 5.6 10.5 8.3 5.5 6.1 16.4 6.4 8.2Meeting Participants (Less than 100 Attendees) 3.9 5.8 3.8 3.9 2.7 3.1 5.1 1.9 3.6

Meeting Participants (Over 100 Attendees) 9.3 6.7 5.8 5.7 3.6 2.4 3.2 5.4 5.3Tour Groups - Domestic 1.6 3.8 4.3 7.5 6.9 6.8 6.0 6.3 6.2Tour Groups - Foreign 5.1 6.3 4.2 5.1 2.5 2.2 13.2 1.8 4.6Other 3.5 7.2 3.4 2.8 2.0 3.2 2.8 3.8 3.2

Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

Guest Analysis

COMPOSITION

Five-Star

Deluxe F iv e- St ar Fo ur-St ar Three -St ar Tw o- St ar O ne -St ar H erit ag e Ot he r

2003-2004All India

Average


Domestic Guests 48.8% 62.8% 69.4% 79.0% 83.1% 84.4% 46.8% 80.4% 75.0%Foreign Guests 51.2 37.2 30.6 21.0 16.9 15.6 53.2 19.6 25.0

Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

Total Business Guests 65.2% 61.8% 67.2% 58.3% 60.6% 49.3% 28.9% 51.7% 58.0%

Total Leisure Guests 34.8 38.2 32.8 41.7 39.4 50.7 71.1 48.3 41.9

Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

Avg. Stay of Domestic Guests (Days) 2.0 1.9 2.5 2.4 2.5 2.7 6.4 2.2 2.6

Avg. Stay of Foreign Guests (Days) 3.1 3.7 4.3 3.1 2.3 3.1 3.3 2.9 3.2

Avg. Stay of Business Guests (Days) 2.0 1.9 2.2 2.1 1.8 2.6 1.6 2.3 2.0

Avg. Stay of Leisure Guests (Days) 3.1 2.2 2.4 2.2 2.8 2.5 1.8 2.0 2.4

Percentage of Repeat Guests 46.7% 37.0% 38.7% 54.3% 38.2% 59.3% 20.0% 45.0% 45.5%

Country of Origin of Guests

COMPOSITION

Five-Star

Deluxe F ive -S ta r Fo ur-St ar Three -S tar Tw o- St ar On e- St ar H erit ag e Ot he r

2003-2004

All India

Average


ASEAN* 4.0% 4.0% 5.5% 7.4% 8.9% 7.5% 1.2% 4.8% 6.1%Australia 2.7 2.5 2.8 2.8 3.9 2.4 5.7 4.2 3.3Canada 2.3 2.3 5.0 3.0 4.1 3.1 2.6 4.3 3.4Caribbean 1.0 0.2 0.3 0.2 0.6 0.4 0.0 0.1 0.3China 1.5 1.7 1.9 2.3 1.7 1.3 1.2 1.2 1.8France 6.8 6.0 6.2 6.2 5.0 3.5 18.1 8.8 7.1Germany 6.6 6.9 7.7 7.8 6.2 5.1 11.7 8.4 7.6Japan 6.5 3.9 7.3 5.1 3.6 6.2 3.2 4.5 5.0Middle East 3.8 4.1 1.6 2.7 6.6 2.8 0.9 3 .9 3.4

Other European 8.5 9.8 5.8 8.3 11.1 5.5 13.5 8.6 8.9Russia 2.9 7.0 5.4 3.1 2.4 2.7 1.9 2.8 3.4SAARC** 4.0 4.6 8.4 8.5 9.6 27.9 1.0 7.5 8.0South Africa 0.8 1.7 2.2 2.0 1.2 2.2 0.6 3.2 1.8UK 17.9 16.7 16.1 16.6 12.4 15.0 20.4 14.2 16.0USA 17.6 12.0 10.4 14.0 11.3 7.0 12.0 11.4 12.7Other 13.3 16.7 13.5 10.1 11.5 7.5 6.0 12.2 11.3

Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

* ASEAN: Association of South East Asian Nations

** South Asian Association for Regional Co-operation - India, Pakistan, Bangladesh, Sri Lanka, Nepal, Bhutan, Maldives



30/61

TABLE 1-6: Indian Hotel Industry by Star Category - Monthly & Daily Occupancy

Average Monthly Occupancy

COMPOSITIONFive-StarDeluxe Five-Star Four-Star Three-Star Two-Star One-Star Her itage Other

2003-2004

All IndiaAverage


January 74.5% 68.0% 67.6% 61.7% 62.5% 65.5% 51.4% 55.1% 63.0%February 79.9 71.2 66.7 61.4 60.5 64.0 56.2 55.2 63.2March 71.4 61.9 58.3 55.0 56.5 55.3 48.3 48.7 56.5April 57.3 56.3 54.5 54.1 57.5 57.6 42.3 50.5 54.5May 53.4 53.1 53.2 57.0 60.2 75.6 39.0 55.4 57.0June 56.5 51.9 50.9 54.7 58.3 59.5 35.2 53.2 54.1July 56.7 51.5 51.6 54.4 54.7 57.0 26.9 49.4 52.4August 57.7 53.5 52.8 50.2 55.3 58.6 36.1 49.6 52.1September 72.4 55.8 69.5 51.5 55.7 60.7 34.9 50.6 55.9October 65.8 59.6 57.4 56.5 59.4 63.2 50.8 56.8 58.3November 78.4 67.0 67.5 66.3 63.7 68.9 57.2 59.0 65.9December 73.6 69.6 72.1 66.0 67.2 71.4 53.8 61.6 67.1

Average Daily Occupancy

COMPOSITION

Five-Star

Deluxe Five-Star Four-Star Three-Star Two-Star One-Star Her itage Other

2003-2004

All India

Average


Monday 64.0% 59.8% 58.3% 52.1% 54.8% 57.2% 35.2% 51.7% 54.4%Tuesday 64.7 62.3 59.5 54.9 55.9 56.0 35.9 52.3 55.9Wednesday 68.5 62.6 61.2 57.4 56.9 57.4 39.7 52.5 57.6Thursday 65.4 62.7 62.8 58.2 59.0 59.7 39.1 55.5 58.8Friday 64.3 60.0 62.0 58.9 58.1 57.1 47.9 53.9 58.5Saturday 61.0 61.0 59.3 52.4 52.6 58.2 52.4 53.8 55.0Sunday 60.7 54.6 55.0 45.2 48.6 54.8 44.4 50.5 49.9

TABLE 1-7: Indian Hotel Industry by Star Category - Sources of Reservations

Source of Advance Reservations

COMPOSITION

Five-Star

Deluxe F ive-Star Four-Star Thr ee-S tar Two-Star One-Star Heri tag e Other

2003-2004

All India

Average


Chain CRS (Central Reservation System) 18.9% 13.4% 7.5% 3.1% 2.2% 1.6% 8.0% 1.6% 5.2%

Direct Enquiry/ Hotel Representative 40.8 47.3 54.4 55.6 61.0 69.9 27.9 63.3 55.0

Global Distribution System (GDS) 6.0 1.9 0.7 1.9 0.6 0.8 0.7 0.1 1.5

Hotel/Chain Web Site 4.8 3.9 3.0 6.0 5.0 1.8 8.8 2.7 4.8Travel Agent & Tour Operator 13.4 22.2 23.8 20.8 16.4 14.0 45.2 21.4 20.9

Other online reservation systems 8.7 5.8 4.3 3.5 2.8 1.4 3.3 2.0 3.7

Other websites 2.9 0.5 1.5 1.6 2.0 0.9 2.8 1.6 1.7

Others 4.6 5.0 4.9 7.5 10.1 9.7 3.3 7.3 7.2

Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0



31/61


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Section Highlights

The majority of responses in our survey for 2003-04 have been from smaller properties, with664 hotels in the less than 50 rooms category, followed by 349 hotels in the 50 to 150 rooms

category and 96 hotels in the more than 150 rooms segment The number of survey participantshave increased in both the lower-end (less than 50 rooms) and upper-end (more than 150 rooms)segments: from 312 in 2002-03 to 349 in 2003-04 in the less than 50 rooms category and from 41to 96 in the more than 150 rooms category This increased response is a possible reason for someof the survey details looking stronger, as more branded and larger hotels participated in thesurvey

Of the total 1,109 useable responses, 146 hotels (87 in 2002-03) have chain affiliations and 963(950 in 2002-03) are independent hotels

Some key highlights of the survey are as follows:

Average occupancy for hotels with more than 150 rooms is 700% in 2003-04; for hotels

with 50 to 150 rooms is 620%; and for hotels with less than 50 rooms is 550% In all threecategories, average occupancy has increased over the level of the previous year

Chain affiliated hotels, which constitute 165% of the respondents, have registeredoccupancy of 630% in 2003-04, and an average room rate of Rs 3,786 In comparison,independent hotels have had occupancy of 590%, with an average rate Rs 2,164 Thedifference in average rate is largely because of the fact that most chain hotels are in three-star and above categories

In 2003-04, the average rate for hotels with more than 150 rooms was Rs 3,960; 50 to 150rooms was Rs 2,053 and less than 50 rooms was Rs 1,102 In 2002-03, the average rate wasRs 3,259, Rs 1,742 and Rs 939, respectively, for the three categories Average rate increased

in 2003-04 for all three categories of hotels As indicated by the survey results, the average number of rooms per hotel in the larger

properties is 262, while hotels in the 50 to 150 rooms segment have an average of 78 roomsper hotel Hotels in the less than 50 rooms segment have an average of 30 rooms per hotelThe average number of rooms for the chain affiliated hotels is 152, while independenthotels have an average of 49 rooms

Large hotels enjoy economies of scale and thus are better positioned to earn higher profitsNet income as a percentage of total revenue was highest for hotels with more than 150rooms at 345% .or hotels with 50 to 150 rooms, it was at 250% and for those with lessthan 50 rooms, it was at 173% Net income across all categories increased to 307% in2003-04 from 249%

463% of chain-affiliated hotels utilise an energy management system Energy costs peroccupied room for these hotels decreased to Rs 667 in 2003-04 from Rs 731 in the previousyear

The domestic business traveller comprises 374% of the independent hotel market .oreignbusiness travellers comprise 222% of the chain affiliated hotel market and only 83% ofthe independent hotel market

505% of chain affiliated hotels have an in-house training department, compared to 172%of independent hotels

111% of chain affiliated hotels utilise the chain CRS as compared to 45% of independent

hotels 95% of chain affiliated hotels have used online reservation systems and websitesas a source of reservations, compared to 49% for independent hotels



33/61

TABLE 2-1: Indian Hotel Industry - Hotel Size & Chain Affiliation: .acilities Analysis andStaffing

Average Number of Food & Beverage Outlets Per Hotel

COMPOSITION

Less Than

50 Rooms

50 to 150

Rooms

More Than

150 Rooms

Chain

Affiliated IndependentNumber of responses: 432 349 37 96 722

Restaurant 1.4 1.8 3.6 2.5 1.6Bar 0.6 0.9 1.6 1.2 0.7Others 0.4 0.8 0.9 1.0 0.5Total 2.4 3.4 6.0 4.6 2.8

Average Number of Total Employees Per Hotel (Permanent / Contract / Full Time / Part Time)

COMPOSITION

Less Than

50 Rooms

50 to 150

Rooms

More Than

150 Rooms

Chain

Affiliated Independent

Number of responses: 523 254 35 46 766

Managers Male 2.5 9.8 38.7 25.5 5.2Female 0.3 1.5 13.3 7.6 0.8

Supervisors Male 3.5 13.1 55.8 31.5 7.4

Female 0.6 2.0 12.1 6.5 1.2Staff Male 28.3 84.8 300.9 190.8 49.7

Female 1.6 7.1 34.0 16.7 4.0Total 36.8 118.2 454.8 278.5 68.4

Average Number of Employees Per Room 1.2 1.5 1.8 1.8 1.4

Average Number of Trained Employees Per Hotel

COMPOSITIONLess Than50 Rooms

50 to 150Rooms

More Than150 Rooms

ChainAffiliated Independent


Managers 88.3% 89.1% 86.7% 91.3% 87.9%

Supervisors 78.1 73.9 78.4 76.8 75.9

Staff 55.9 64.0 64.3 63.4 60.6

Total Average Trained Employees 74.1 75.7 76.5 77.2 74.8Total Average Un-Trained Employees 25.9 24.3 23.5 22.8 25.2

Hotels with Training Department 20.3% 29.1% 56.8% 50.5% 17.2%

** Trained employees includes those with a minimum one year certificate course in an educational institute, however some hotels may have included these with short term(in house) training.

Typical Room Profile of an Average Hotel

COMPOSITION

Less Than

50 Rooms

50 to 150

Rooms

More Than

150 Rooms

Chain

Affiliated Independent


Air-Conditioned Single 2.0 5.8 57.6 22.9 4.5Double 15.7 50.0 181.7 114.5 28.8Suites 2.5 6.4 21.1 10.3 4.2

Non-Air-Conditioned Single 1.3 2.2 1.1 0.2 1.7Double 7.6 12.3 0.0 3.4 9.1Suites 0.8 1.1 0.0 0.5 0.9

Total Average Rooms 30.0 77.7 261.5 151.7 49.1

* The number of non air-conditioned rooms in lower star category hotels appears to be higher, partly because many are located in hill stations where air-conditioning is notprovided in hotels.



34/61

Number of responses: 80 404

Average Total Rooms Per Hotel: 156 68

Average Occupied Rooms Per Hotel: 37,718 14,809

Average Occupancy Per Hotel: 63.0% 59.0% Average Rate Per Hotel: Rs 3,786 Rs 2,164

COMPOSITION

REVENUERoomsFood & BeverageBanquet & ConferencesTelephone & OtherMinor Operated*Rental & Other Income

Total

DEPARTMENTAL EXPENSESRooms

Food & BeverageTelephone & OtherMinor Operated*Rental & Other Income

Total

DEPARTMENTAL INCOME

OPERATING EXPENSESAdministrative & GeneralManagement FeeMarketingFranchise FeesProperty Operations & MaintenanceEnergy

Total

HOUSE PROFIT

FIXED EXPENSESProperty TaxesInsuranceOther Fixed ExpensesRent

Total

NET INCOME**

Percentage

of Revenue

55.0%

29.26.52.94.12.4

100.0

17.5

53.839.841.3

0.131.7

68.4

7.73.43.70.36.29.7

31.0

37.4

1.10.61.30.94.0

33.4%

Amount Per

Available Room

Rs 917,316486,638107,558

48,50468,69139,600

1,668,310

160,657

319,76419,31428,333

31528,098

1,140,210

129,06857,08160,943

5,132102,699161,480516,403

623,806

18,4409,893

22,35915,42966,120

Rs 557,686

Amount Per

Occupied Room

Rs 3,7862,009

444200284163

6,886

663

1,32080

1170

2,180

4,706

533236252

21424667

2,131

2,575

76419264

273

Rs 2,301

indian hotel industry survey 2003-2004

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